. Daily FX Analysis - GBP Dips, EUR Peaks, USD/CAD Holds, USD/CHF Plunges

Daily FX Analysis – GBP Dips, EUR Peaks, USD/CAD Holds, USD/CHF Plunges

Daily FX Analysis – GBP Dips, EUR Peaks, USD/CAD Holds, USD/CHF Plunges

15 Nov 2023

Introduction:

 “In the financial markets today, various currency pairs are in focus. GBP/USD slips below 1.2500 after soft UK inflation data, dampening interest in Pound Sterling. Meanwhile, EUR/USD faces resistance below 1.0900 amid overbought conditions, supported by weaker-than-expected US inflation. USD/CAD hovers near 1.3688 ahead of US Retail Sales and PPI data, while USD/CHF experiences a substantial decline below 0.8900 on downbeat US inflation, with focus shifting to PPI. As the month progresses, eyes are on the Swiss ZEW Survey – Expectations and Real Retail Sales.

GBP/USD:

GBP/USD declines below 1.2500 after soft UK inflation data.

The GBP/USD faced slight downward pressure, slipping below 1.2500 during the Wednesday morning in Europe. Data from the UK revealed a decrease in the annual CPI inflation, dropping to 4.6% in October from 6.7% in September. This led to a waning interest in Pound Sterling.

In the European session on Tuesday, GBP/USD is sustaining a three-day recovery, buoyed by positive momentum derived from the varied UK employment data.

Nevertheless, the GBP/USD pair’s potential for additional gains seems limited, as traders of Pound Sterling exercise caution and abstain from initiating new positions on the pair, anticipating the release of crucial US Consumer Price Index (CPI) data later in the day.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2429 | Positive Crossover | Bullish
  • MA 20: 1.2323 | Positive Crossover | Bullish
  • MA 50: 1.2266 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.2425 | Positive Crossover | Bullish
  • MA 20: 1.2303 | Positive Crossover | Bullish
  • MA 50: 1.2234| Positive Crossover | Bullish

RSI (Relative Strength Index): 73.06| Buy Zone | Bullish

Stochastic Oscillator: 93.59| Buy Zone | Neutral

Resistance And Support Levels:

  • R1: 1.2501| R2: 1.2673
  • S1: 1.2383| S2: 1.2223

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2395 | Take Profit: 1.2539 | Stop Loss: 1.2295

EUR/USD:

EUR/USD constrained below the 1.0900 mark amid overbought condition.

EUR/USD experiences an upswing beyond 1.0850 but encounters resistance below the 1.0900 threshold in the early hours of Wednesday’s European trading. Weaker-than-anticipated US inflation data puts downward pressure on the US Dollar (USD), providing support to the EUR/USD pair.

The EUR/USD saw a substantial rally of approximately 200 pips, driven by a sell-off in the Dollar following the release of US consumer inflation data. Marking its most substantial daily gain in months, the pair seems positioned to sustain its upward momentum.

Wednesday will bring further US inflation data with the unveiling of the Producer Price Index (PPI). In addition, close attention will be paid to the October Retail Sales report.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0828| Positive Crossover | Bullish
  • MA 20: 1.0737| Positive Crossover | Bullish
  • MA 50: 1.0677 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.0820 | Positive Crossover | Bullish
  • MA 20: 1.0721 | Positive Crossover | Bullish
  • MA 50: 1.0655 | Positive Crossover | Bullish

RSI (Relative Strength Index): 74.48| Buy Zone | Bullish

Stochastic Oscillator: 96.81| Buy zone | Positive

Resistance And Support Levels:

  • R1: 1.0886| R2: 1.1040
  • S1: 1.0754| S2: 1.0629

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0937| Take Profit: 1.1040 | Stop Loss: 1.0863

USD/CAD:

USD/CAD remains below the 1.3700 level as the upcoming release of US Retail Sales and PPI data looms.

USD/CAD advances near 1.3688, benefiting from a weakened USD. October’s US Consumer Price Index (CPI) shows a year-on-year growth of 3.2% compared to the previous 3.7%.

The potential rise in oil prices could support the Canadian Dollar (CAD). The focus is now on Wednesday’s release of US Retail Sales and Producer Price Index (PPI).

The USD/CAD pair encounters selling pressure in the Asian session on Wednesday. The diminished strength of the US dollar, influenced by a notable decline in US Treasury bond yields, impacts the USD/CAD pair. Currently, the pair is positioned around 1.3688, registering a 0.03% loss for the day.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.3720 | Negative Crossover | Bearish
  • MA 20: 1.3762| Negative Crossover | Bearish
  • MA 50: 1.3756 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.3730 | Negative Crossover | Bearish
  • MA 20: 1.3774 | Negative Crossover | Bearish
  • MA 50: 1.3780| Negative Crossover | Bearish

RSI (Relative Strength Index): 36.62| Selling Zone| Bearish

Stochastic Oscillator: 0.27 |Selling Zone | Negative

Resistance And Support Levels:

  • R1: 1.3782| R2: 1.3893
  • S1: 1.3676 | S2: 1.3537

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.3643 | Take Profit: 1.3542 | Stop Loss: 1.3723

USD/CHF:

USD/CHF declines below 0.8900 on downbeat US inflation data, focus shifts to PPI

USD/CHF experienced a decline of over 100 pips following a more significant than expected easing of US inflation. The subdued US Consumer Price Index (CPI) data increases the probability of the Federal Reserve refraining from further interest rate hikes. SNB Chairman Jordan hinted at the possibility of additional rate increases in the future.

On Tuesday, USD/CHF experienced a significant and abrupt decline of over 100 pips, primarily attributed to the disappointing US inflation data. The pair appears poised to continue its losses, trading at a lower level of around 0.8890 during the Asian session on Wednesday.

As the month advances, attention will be given to the Swiss ZEW Survey – Expectations and Real Retail Sales.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8914 | Negative Crossover | Bearish
  • MA 20: 0.8976| Negative Crossover | Bearish
  • MA 50: 0.8996| Negative Crossover | Bearish

Simple:

  • MA 5: 0.8925 | Negative Crossover | Bearish
  • MA 20: 0.8990| Negative Crossover | Bearish
  • MA 50: 0.8999| Negative Crossover | Bearish

RSI (Relative Strength Index): 29.2| Selling Zone | Bearish

Stochastic Oscillator: 3.57| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 0.8949 | R2: 0.9049
  • S1: 0.8870 | S2: 0.8732

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.8825| Take Profit: 0.8732 | Stop Loss: 0.8896.

Elsewhere in the Forex Market

NZD/USD up 0.42% to 0.6033. The AUD/USD up 0.05% to 0.6509. The EUR/GBP up 0.16% at 0.8717. USD/JPY up 0.18% at 150.65, EUR/JPY up 0.15% at 163.82, The USD/CNY down 0.19% at 7.2393, AUD/SEK down 0.01% at 6.8917, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) GDP (QoQ) (Q3) Actual –0.5%, Forecast –0.1%, Previous1.2% at 05:20.

(CNY) Industrial Production (YoY) (Oct) Actual 4.6%, Forecast 4.4%, Previous 4.5% at 07:30.

(GBP) CPI (YoY) (Oct) Actual 4.6%, Forecast 4.8%, Previous 6.7% at 12:30.

(USD) Core Retail Sales (MoM) (Oct) Forecast –0.2%, Previous 0.6% at 19:00.

(USD) Retail Sales (MoM) (Oct) Forecast –0.3%, Previous 0.7% at 19:00.

(USD) PPI (MoM) (Oct) Forecast 0.1%, Previous 0.5% at 19:00.